bswift Study Finds Benefits in a State of Evolution, not Revolution
CHICAGO, IL — Thursday, June 18th, 2015
bswift, a leader in cloud-based technology and services for employee benefits and health exchanges, has released its sixth annual study, conducted in conjunction with Employee Benefit News. Study findings show that the rate of private exchange adoption has been modest to date, but increasingly, technology is playing a bigger role in how consumers shop for and use their benefits. The results provide mounting evidence that technology is enabling a transition from a traditional paternalistic approach to benefits toward a more consumer-centric method.
“There has been a lot of debate about whether or not employers are moving en masse to a radical new private exchange model,” said Rich Gallun, CEO, bswift. “The bottom line is that they are incrementally shifting ownership of the benefits spend to their employees. Employers are expanding plan choice and using consumer-facing technology to help employees make educated and personalized decisions; in essence, they are providing tech-enabled choice. At the same time, employers are putting more ‘skin in the game’ for employees, as evidenced by increasing wellness incentive amounts.”
The 2015 bswift Benefits Study was based on the results of a survey conducted by SourceMedia among 500 benefits decision makers at organizations of 50 or more employees that offer health benefits. The study can be downloaded from the Industry Insights section of the bswift website.
“This study helps us to benchmark against important trends in employee benefits as the entire industry adapts to mounting cost pressures and prepares for the impact of regulatory requirements,” said David Olsen, director of benefits at Lennox International, a bswift client. “It also gives us a good overview of the most significant trends in the market and how other employers are engaging employees with their health benefits.”
Responses show adoption rates for private exchanges are more modest than have been widely publicized and predicted. Five percent of large employers (defined as those with more than 500 employees) surveyed report that they currently offer a private exchange. Among those that do not have private exchanges, six percent are considering one for next year. bswift concludes that these results are impacted by the absence of a standardized definition of the term “private exchange” and also by many employers taking a phased approach to adoption of exchange components rather than a complete replacement of their current benefits program.
The increasing use of tech-enabled choice is emerging as a significant trend among employers. For example, defined contribution—where employees receive funds from employers to choose benefits from a menu of options—is currently offered by 10 percent of large employers. Moreover, 17 percent of large employer respondents are considering implementing defined contribution for 2016. The research also shows that employers are adding health insurance choices for employees such as more health plan designs (especially High Deductible Health Plans), more carrier options and more network options, including high performance networks. To help employees make informed selections, 33 percent of large employers now provide decision support tools to help guide consumers through the shopping and enrollment process.
The use of technology in benefits continues to grow. Among large employers, 83 percent now offer online enrollment for open enrollment, while 75 percent offer it for new hire enrollment. These figures are up from 80 percent and 71 percent, respectively, in the previous year’s study. bswift anticipates that compliance with Affordable Care Act (ACA) requirements, such as completing the mandatory 1095 forms in January 2016, will drive even more adoption of benefits technology.
On the wellness front, the shift in ownership of benefits from the employer to the employee is also taking hold. Forty percent of large employer respondents with wellness incentives offer annual incentives of $500 or more, up from 29 percent in 2013. Additionally, employers are increasingly using social tools, such as fitness challenges, to engage employees in these programs. Among large employers with wellness programs, 34 percent now offer social challenges to employees, up from 17 percent two years ago.
“We anticipate that the next three years will bring continued movement toward consumerism, but many employers will take incremental steps to get there,” said bswift’s Gallun. “If the tax code happens to change to remove the advantages of group health coverage, the market may change more quickly. For now, there is steady progress in leveraging technology and expanding choice to empower consumers to take control of their own benefits.”
bswift is changing the world of benefits administration by combining deep expertise and a passion for technological innovation with a unique consumer-driven approach. Partnering with enterprises nationwide and serving millions of employees, bswift offers cloud-based technology and services for online enrollment, interactive decision support, ACA compliance reporting and employee engagement. bswift also provides access to consumerism, product and consulting solutions needed to build a benefits program specialized for both employers and employees alike. For more information about bswift, an Aetna company, visit www.bswift.com.
MEDIA CONTACTEmma Frutkin